Download The G7: A Simulation - Global Economic Interdependence

PRODUCTION REQUIREMENTS
Annual Requirements
Food
Per year
Energy Generation
Per every 1,000 units of GDP that you exceed (i.e.: $1,000 =
; €1,001 =
)
Construction Requirements
Productivity Improvements (Improves cost efficiency and makes more resources accessible)
Infrastructure
Technology
Light Industry
Each
High Capacity Factory
Each
Office Tower Construction
Per 10 stories
Any International Action, Summit, or Negotiation
Per deal
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
ORDER OF PLAY
ORDER OF PLAY
1. Pay Interest, fees, debt re-payment, and pay annual food and oil
2. Collect Government Subsidies and Rental Income
3. Free for all for everything else (i.e. real time simulation)
4. Adjust your government’s monetary and fiscal policy
INTERNATIONAL ARRANGEMENTS
Subsidiary
FACTORY: You own it
FEES: None
Franchisee
FACTORY: You own it
FEES: Pay per resource made
Licensee
FACTORY: They own it
FEES: Pay per agreement per year
PRICE OF RESOURCES
Base Price (€£$¥ 10 to start) + Taxes (see below) + Other Fees (Country Specific)
TAXES ON RESOURCES
One €, £, ¥, or $ for every 4.9% of corporate taxes
0 – 4.9%
5 – 9.9%
10 – 14.5%
€£$¥ 1
€£$¥ 2
€£$¥ 3
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
RULES OF PLAY
Roles to Fill
For the Government:
1. PM & Minister of Finance (borrowing, tax levels, spending levels, trade deals with countries)
2. Governor of the Central Bank (interest rates, reserve ratio, printing money)
For the Corporation:
3. CEO – Chief Executive Officer (negotiating, deals with companies, interaction with other corporations)
4. CFO – Chief Financial Officer (all calculating, ordering production)
Each group must appoint a secretary each day. The secretary will record important events and info for
the reflection. In addition, EU members’ Presidents must decide as a group on their Monetary policies.
Capital and Natural Resources
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Resource Availability: each resource patch has a potential production of 6 resources per year.
o To increase availability: increase investment infrastructure and technology
Production Capacity: Depends on how many factories you have on a resource. Large factories
produce 3 units per year; small ones produce 1. Capacity cannot exceed availability.
o To increase capacity: Build more factories
Productivity: In addition to improving access to resources, each investment in infrastructure or
technological research also improves efficiency and thus lowers the cost of resources.
Trading
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NOTE: bartering resource for resource is forbidden. You will receive MARK penalties.
Pay for your resources in YOUR currency (money represents labour and production costs etc).
Pay for others’ resources in THEIR currency.
You only get to order once per turn. Exact order and change or back of the line.
Exchanging currency with the World Bank/IMF must be done in denominations of 10.
No trade agreements exist at the start of the game except for the EU.
Once nations have an agreement or “Most Favoured Nation Status,” they can’t be stopped from
licensing, franchising, or investing in your country, nor can you be stopped from doing the same.
Foreign Expansion
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Franchised
Licensed
Subsidiary
All real property (buildings, land, factories AND resources) can be owned, purchased, sold,
franchised, or licensed.
Franchised or licensed property can’t be used to produce for anyone except the franchisee, or
licensee without his or her consent.
You can’t unilaterally end any type of agreement.
Agreements must be in writing and filed with the banker.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
Office Tower Construction
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Prices of construction may change without notice.
Rental rates are fixed unless stated otherwise. Rent of $1 (Canadian) per story is paid each year.
Once you build a tower, you own that block of land in Toronto. No one else may build there without
an agreement.
A tower laid, is a tower played. It can NEVER be moved again. However, you can pay to have it
demolished. Prices vary.
You must be able to place a finger between buildings.
Debt and Borrowing
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The World Bank/IMF Group
You may borrow amongst yourselves, or from your central bank. Governments AND Corporations
may borrow.
Loans must be repaid in the currency in which they were made.
Interest on borrowed funds, plus 5% of outstanding debt must be repaid at the beginning of each
year or assets will be seized. The interest rate is YOUR nation’s overnight lending rate.
Monetary and Fiscal Policy
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You have all four tools available: tax rates, spending levels, money supply, and interest rates.
Changing them will have a variety of effects. They will impact inflation, economic growth, your
currency rate, debt payments, and the subsidies your construction company receives.
Note that it’s the retail Prime Rate that determines if your citizens will borrow (set by banks); you
can only influence it indirectly by changing the overnight target rate.
You begin with an M1 money supply of $£€300 (¥30,000). Only 90% of this is in circulation as
required capital reserves start at 10% for each country.
Once inflation hits 10% a year, there’s a high probability you will not be able to produce the
resources you need as a result of labour unrest due to eroding salaries.
The EU President for the day has the final decision on monetary policy for the EU.
Though European nations have control over their own fiscal policies, they should align it with the
existing EU monetary policy so they don’t counteract each other
You must monitor your supply of currency very carefully; if you run out, it will be difficult to
conduct business with the world. For the relationship MV=PQ, V is assumed to equal 3⅓, and P is
10 to start with (¥1,000 for Japan).
Make sure you monitor the leakages and injections caused by fiscal policy carefully. Their relative
size to GDP is critical.
Miscellaneous
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Failure at year’s end to pay 1 oil per $1000 of GDP and 2 food per country, will result in a decrease
of about 5% of your GDP due to blackouts and starvation.
It’s your responsibility to ensure the banker enters information accurately
The game God (that’s Boulton) may introduce ‘authentic events’ into the game at a whim. Don’t
argue with the game God.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
ORDER SHEET
Year 1 Year 2 Year 3 Year 4 Year 5
Oil
_________
________
_________
__________
_________
Minerals _________
________
_________
__________
_________
Brick
_________
________
_________
__________
_________
Lumber
_________
________
_________
__________
_________
Textiles
_________
________
_________
__________
_________
Food
_________
________
_________
__________
_________
Year 6 Year 7 Year 8 Year 9 Year 10
Oil
_________
________
_________
__________
_________
Minerals _________
________
_________
__________
_________
Brick
_________
________
_________
__________
_________
Lumber
_________
________
_________
__________
_________
Textiles
_________
________
_________
__________
_________
Food
_________
________
_________
__________
_________
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
RESOURCE COST = BASE LABOUR PRICE + TAXES
LEADING INDICATORS
ALL groups MUST keep a yearly data log for later reflection
Year
Nominal
GDP
Real
GDP
Growth*
CPI
Tax
Rate
Spending
Levels
Budget
Balance
(net
leakage)
Overnight
Rate
Prime
Rate
Reserve
Ratio
Bank
Reserves
Exchange
rate in
$USD or
in € if
U.S.A.
Total
Gov.
Debt
(%Δ
MV) –
(%Δ
PQ)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Use this data to produce economic graphs of leading indicators for your analysis.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
INDICATOR DISPLAY BOARDS
This is the first screen. Here you enter choices for Fiscal and Monetary Policy. It
also summarizes data for your economy, highlights victory conditions, states
who’s currently winning.
Information
(Leading Indicators)
You can see Canada has a GDP of $1,534,
a GDP growth rate of -8.8%, inflation of
21.1%, and prime interest rates are 30%.
Entry
(Fiscal & Monetary Policy)
Change your policies for the
NEXT fiscal year. Make sure
they are entered correctly.
Entry
(Resource Order Area)
This is where you place your
production order for resources. It’s
your responsibility to make sure the
information entered is correct.
Information
(Comparative Prices)
This converts all prices
to US dollars, and shows
you whose prices are
cheapest for resources. It
includes local taxes. In
this example, Japan has
the cheapest prices at
just over $10 US.
Information
(Exchange Rates)
All rates are displayed here. Currency being
sold is on the left. Currency being acquired is
on the top at right. In this example, the UK is
selling £20, which is worth €31, or $CDN 31.
Information
(Finished Ordering)
If a red * appears over
your flag, your country has
already ordered. You may
not order again this year.
Victory Condition
(Corporation)
The nation with the most stories
constructed wins. Here you can see
Canada is ahead, followed by Italy.
Victory Condition
(Government)
The nation with the largest GDP
increase wins. Here, the EU is behind
with a GDP equal to only 81% of
their starting amount in the game.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
These are the second and third screens. This is mostly for information. However,
your borrowing and lending occurs here as well.
Entry
(Borrowing or Repayment)
Use this space for decisions on borrowing or repaying.
Here Italy has €239 outstanding, has interest of €23,
and must make a minimum payment of €35. In this
example, Italy will be borrowing another €10 due to a
budget deficit (last line).
Information
(Leading Indicators)
This is the same as screen
one. It’s just here so you
can see it while working on
this screen.
Information
(Fiscal Policy)
This shows you the level of your
spending, and your taxation. It also
shows you your projected budget
surplus or deficit.
Information
(Monetary Policy)
This shows you M1 money supply,
chartered bank reserves, and balance
of the MV=PQ relationship.
Entry
(Fiscal & Monetary Policy)
Change your policies for the
NEXT fiscal year. Make sure
they are entered correctly.
This is the third area used.
Entry
(Infrastructure)
This indicates how much each country has
invested in infrastructure improvements. Good
things happen after every 4 improvements. In this
example, France has made 2 investments in roads,
and 2 in technology research/development.
Information
(Available Resources)
Quantity and quality of natural resources
varies from country to country. This
indicates the maximum that can be harvested
from each country per year. In this example,
Canada cannot produce lumber.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
Economic Game Simulation
CIA 4U1
INSTRUCTIONS:
Using the “Observations During Gameplay” page, and your group’s daily reflections, type up a summary of the
connections you made from this simulation. Do your most insightful THREE.
Level
0 1 2 3 4
Category
Summative
(i) Identified meaningful, specific,
and significant events from the
simulation, and
(ii) Related them insightfully to
MAJOR course concepts; used
course knowledge to explain
game events.
(iii) Explained how the game events
that you have described,
EXACTLY resemble events that
have occurred in real life (in terms
of economic factors, causes, and
effects)
How to Improve
Mark
Total Marks:
/3
/25
(Use the “What did I learn” template for four, and one should come
from your own insight – make sure it relates to economics somehow.
Check with me if you are uncertain.)
/3
Clearly separate all five into parts (i), (ii), and (iii)
/3
You MUST use actual, SPECIFIC events from the real
world here in (iii). Cite references using APA.
/1
Each individual must include (i) an electronic version of
the group data log.
Data log completed each day
Proper graphs of your leading indicators
must be included, and integrated
seamlessly into the body of your text.
Graphs and data must enhance your
explanations, must be analysed and
connected to course learnings, and must
be used to explain your mistakes and
successes.
Technical Specifications (1 mark
removed for each error or omission).
/10
This must be your own work. Group related stats on the
same graph. Don’t throw everything on one chart.
Can you see why economists track ‘leading indicators’ and use graphs?
Do your decisions and their effects become clearer when looking at
your graphs?
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/5
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First page of file includes your email address (as a live link)
and a copy of this rubric
Events in part (iii) are sourced APA style plus a live link
Each topic, and parts (i), (ii), and (iii) within each topic are
clearly identified
Minimum 12 pt font and 1.5 spacing
Only one Google Docs file was shared.
File is named using the convention:
CIA_year_summative_sirname
Group Assignment – Policies & Trade
Used existing knowledge of course
concepts to achieve success. This is a
GROUP mark.
Total Marks:
/20A
&
/20T
/40
Highest Real GDP (1st place 20, last place as low as 9)
OR
Greatest Wealth Accumulation in $USD (20 down to 9)
NOTE: No one on a team earns more than 75% if their country
doesn’t have real GDP growth by the end of the game
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
OBBSSEERRVVAATTIIO
ON
NSS DU
UR
RIIN
NG
G GA
AM
ME
EP
PL
LA
AY
Y
HOW DO THESE
AFFECT THESE
Why do we trade?
What makes it
possible?
Necessary?
Specialization
Economic
interdependence
and convergence
Impact of exchange
rates on trade, and
wealth
accumulation
World
Organizations –
pros and/or cons
Scarcity, labour,
supply and
demand, and
economic
incentives
Importance of
infrastructure,
technology,
productivity
Impact of the
money supply
and interest
rates
Impact of
inflation
Impact of fiscal
policy
Why do we trade?
What makes it
possible? Necessary?
Specialization
Economic
interdependence and
convergence
Impact of exchange
rates on trade, and
wealth accumulation
World Organizations –
pros and/or cons
Scarcity, labour,
supply and demand,
and economic
incentives
Importance of
infrastructure,
technology,
productivity
Impact of the money
supply and interest
rates
Impact of inflation
Impact of fiscal policy
Connect the concepts on the left, with how they relate or interact with the ones above. (The shaded areas are duplicates, no need to fill them in.) Don’t just list
anything. Pick the most insightful events; the ones that “brought it all together” for you.
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
TH
HE
E AC
CT
TO
OR
RSS
Canada
France
Germany
Italy
Japan
For the
Government
Head &
Finance
Central
Bank
For the
Corporation
CEO
CFO
DUTIES:
For the Government:
1. PM & Minister of Finance (borrowing, tax levels, spending levels, trade deals with countries)
2. Governor of the Central Bank (interest rates, reserve ratio, printing money)
For the Corporation:
3. CEO – Chief Executive Officer (ordering production, negotiating with companies, interaction with other corporations)
4. CFO – Chief Financial Officer (all calculations, tracking and analysing leading indicators, providing data for reflections)
Developed by J. Boulton for senior level business courses BBB 4M, BAT 4M, and CIA 4U
UK
USA